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Patrick, Esq., Lawyer

Category: California Employment Law

Satisfied Customers: 11284

Experience: Significant experience in all areas of employment law.

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My company wants to reduce salary of some employees because

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My company wants to reduce salary of some employees because the management thinks these employees are over-paid. I am the HR person and I am concerned that this will expose our company to possible law suits because it is very difficult to explain why some people will have salary cut while others don't. Is there anyway my company can achieve this purpose without litigation risks?

Pay cuts are extremely common in this economy, and employers retain tremendous discretion to change the rates of pay of their employees at any time. Furthermore, the burden is on the employee to prove a discriminatory motive, so unless they have compelling evidence that they are being targeted on the basis of race, religion, gender, etc., their mere suspicion of impropriety would get them nowhere, and no plaintiff's attorney would pursue such a case.

Unless your company's paycuts are having a disproportionate impact on minorities within the company or there is already a history of allegations of discrimination made by the people who are now being targeted for reductions, the Labor Code vigorously protects an employer's right to manage their business and change the terms of employment at any time, and employers should not be worried about the legal repurcussions of taking this sort of action.

As always, please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

If you do not require any further assistance, I would be most grateful if you would remember to provide my service a positive rating, as this is the only way I will receive credit for assisting you.

Finally, please bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

Thank you for your quick response. May I ask you some further questions?

Is it OK if my company sends individual letters to the ones we want to cut their salary only (i.e. we don't want to communicate to the whole organization that we are cutting salary of some people) and ask them to keep this information confidential?

Will the reason for cutting salary to allign salary range/grade between a specific group of employees (which means some employees in the same group have a pay cut while some others of the group don't, depending on their current salary and their performance) a valid one?

Thank you very much for you reply. The answer to both of your followup questions is "yes" with the only exception being that employers cannot legally prohibit employees from discussing their salaries. This is a right afforded to employees via the National Labor Relations Act.

I hope this helps.

Kindest regards.

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